Cassidy Financial Services  View Point 

 December 15, 2022

2022 has been challenging for investors. A rare year when when stocks and bonds are temporarily down at the same time. We had an overreaction to rising interest rates which is an overreaction to the significant inflation that started in 2021. 

Rising interest rates make it more expensive to borrow and causes slowing business activity.  Higher borrowing expenses reduces corporate profits. Stock prices rise and fall with corporate profits. 

As inflation cools and interest rate increases likely to plateau, going into 2023, the economy and the market will recover as they always have. The stock market rebound in October and November is an early forward-looking indicator of this. 

Are we currently in a recession? Will we go into a recession soon? Recessions are marked by massive layoffs, factory closings, and large amounts of unsold inventories, such as car dealers who can’t sell vehicles. We do not see these conditions. Our research suggests that we might have a mild recession next year – but we might not. There is no guarantee about a recession. They are always identified by looking backwards over 6-9 months and cannot be predicted.

As investors, we have seen many of these temporary drops and subsequent rebounds over many decades. Today’s economic situation is nowhere near as bad as described by the gloom and doom forecasters. 

Investors should stay the course or they will miss the rebound. Timing the market; whereby many investors try to guess when to get in and out, has never been an effective strategy. Investors who get out of the market seeking temporary “safety” until “things get better” have missed many rebounds in the past. And have been disappointed for years afterwards. 

We look forward to meeting or speaking with you at anytime regarding your personal investment plan. Please give us a call with any questions you may have.  Our office number is 860-623-0104.  We wish you and your families all the best and look forward to a bright 2023!!!

Warmest Regards,

Brian, Arnie and Dan

As usual this commentary is based solely the opinions of Brian Cassidy, Arnie Magid and Daniel Kelly. Nothing in the above written material is endorsed by, or written by, or provided by Cambridge Investment Research, Inc., or by any other outside party or firm.

Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC.

Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor.

Cassidy Financial Services, LLC. and Cambridge are not affiliated.